That seems to be a pretty obvious question, isn't it? Why don't you just ask your supplier how long delivery will take and end of story?
Unfortunately having high on-time delivery rates is not as easy as that, and it entails much more than just letting the supplier know when you will need your materials.
Let’s start by naming some of the negative repercussions that a failed supplier management could cause to your enterprise. As an example of the possible damage, let's take a real-life example: Volkswagen against Prevent. Some years ago 2 of the companies within the Prevent group stopped delivering to Volkswagen production lines for a couple of days causing 6 production lines to stop for several days. The reasons behind this are irrelevant for our reflection. Volkswagen claimed 66 million euros for damages from Prevent.
So, as the example clearly shows, a failed supplier management means of course a higher level of complexity when it comes to managing your entire organization. Amongst other things. For example:
So, you obviously don't want to be having all of those troubles. Let’s have a closer look into the elements that make delivery times a complex matter.
As you can see in the picture there are 3 important points in time when it comes to getting our orders delivered.
So what we call “delivery time” is actually just one of those 3 things, even though all of those matter in order to plan your inventory and production effectively. Luckily there is a term that refers to the whole process and even more, the replenishment lead time.
What exactly is the replenishment lead time? How can you calculate it? And of course, how can you avoid the problems we mentioned above and get additional benefits?
Find all of those answers in our upcoming BLOG you can not miss!
your Statistance team.